RTS boss talks up Russian recovery

THE president of the RTS Russian Stock Exchange has cast aside fears foreign investors will be put off by by the arrest of the country's richest man and former Yukos chief executive Mikhail Khodorkovsky.

Vladislav Streltsov, in London as part of a transatlantic charm offensive, said he believed the mini-recovery in the RTS since the row at Yukos hammered Russian share prices was a sign of the market's growing 'maturity'.

Khodorkovsky's arrest for fraud, and the government's decision to freeze his 44% stake in Yukos, wiped out billions of market value and sparked fresh fears about the free-market environment in Russia.

The RTS fell 10% when news of Khodorkovsky's arrest broke, but Streltsov said he believed the high interest in the case reflected the appetite for Russian stocks within the Western investment community.

He added: 'The index has been growing over the past two years so there was going to be a correction of some kind but the market was mature enough to stop at a certain level. The market was mature enough not to panic too much.'

RTS, Russia's first exchange, is home to almost 200 listed companies with stocks on the market quoted and settled in dollars. Its relative infancy is shown by the fact the top 10 stocks account for 98% of trading volume.

Streltsov hopes to attract more foreign investment by highlighting companies due to float on the exchange, including Russia's leading aircraft maker Irkut, aluminium producer Sual and telecoms business Megafon.

Streltsov's calm is supported by a survey this week which found that 54% of foreign investors in Russian shares are still positive about the country's stock market despite the Yukos affair. Consultancy Andsell Associates added that 72% believe Russia's stock market performance will improve over the next year.